Building Trust in NGOs

NGOs have faced a series of high-profile scandals in the past few years that have led governments, regulators, and donors to question how we can re-build trust in these organizations. These scandals have featured diverse breaches of the public trust. This includes a misuse of charity funds (Kids Company), inappropriate ethical conduct of staff towards beneficiaries (Oxfam), and use of high pressure sales tactics on elderly or vulnerable people when fundraising (multiple charities). The response to each of these scandals has been characterized by a call for NGOs to reform themselves to regain the public’s trust. Many of these calls have focussed on issues of accountability and transparency – that if NGOs become more transparent, we will be more likely to trust them. While the NGOs in the above-mentioned examples have each taken reform measures (or been forced to do so) to improve their accountability (Public Administration and Constitutional Affairs Committee, 25 Jan 2016, HC 431; Committee of Public Accounts, 13 Nov 2015, HC 504), trust seems to be an issue still within the sector.

The issue of trust and perceptions of trustworthiness are exceptionally important to NGOs, particularly donor trust in their work. Given the competitive NGO marketplace vying for donor money, perceptions of untrustworthiness can be fatal to an NGO, leading donors to start to divert their resources to other charities – or stop interacting with the NGO altogether. Although it is clear why trust might be important for NGOs, it is less clear how NGOs may be able to regain trust, particularly in the aftermath of a public scandal.

In response to concerns over NGOs’ trustworthiness, a report commissioned by England and Wales’ main regulatory body, the Charity Commission, shows that there is expressed public desire for “greater authenticity not just more transparency” in charitable organisations that revolves around NGOs’ ethos and values to keep tabs on undesirable behaviour in the sector (Charity Commission and Populus, 2018, 2). This shift in attitude is revealing, as it seems to imply a public reckoning of the limitations inherent in accountability frameworks as hitherto used and their effectiveness in regulating NGOs. It is therefore interesting to explore this shift in emphasis, why would a regulator not stick to focusing solely on accountability measures? Why might authenticity and values, rather than more rules and transparency, be important in its strategy to rebuild trust with donors and the public more broadly?

We argue that the accountability frameworks historically proposed as a solution to a loss of public trust in NGOs relied too much on rational trust assumptions, and that social sources of trust have been an overlooked aspect in this debate. This recent report by the Charity Commission, however, is a sign of the debate shifting to include social factors such as authenticity and values – alongside measures of transparency – that can influence trust. We argue such transformation is a positive first step in recognising the importance of how social factors can be stressed by regulators to help NGOs increase the public perceptions of their trustworthiness.

To explain our position, it is important to know that, in addition to domestic regulation, NGO accountability measures also rely heavily on self-regulatory frameworks, often drawn from existing public and private sector frameworks, and are chiefly guided by self-interest or shared norms (Crack, 2017). Accountability frameworks........